HispanicBusiness

Personal relationships are an important part of business dealings in Latin America, where punctuality is a variable commodity and business meetings often start and end late. In France, a bright line separates a persons work life and their home life. Businesspeople in certain Arab countries sometimes use the word "yes" in order to delay a decision, rather than to make one.

Every culture has its identifying idiosyncrasies, and recognizing them, or, at the very least, not running afoul of them, is a vital part of any credit and risk professional's international development. However, unless a company plans to have business dealings only in the United States, or only in one particular country other than its own, it can't take a one-size-fits-all approach to cultural sensitivity.

This can often stymie efforts to increase organizational consistency using communication guidelines in credit policies and procedures. "Understanding different cultures involves the use of soft skills, which are difficult to spell out in a policy or procedure," said Craig Simpkins, CCE, CICP, director and global process owner of the order-to-cash cycle at Johnson Controls, Inc. "However, there are developmental tools that the organization can offer to their employees that will help drive success in understanding different cultures."

These developmental tools can be as simple as doing a minor bit of research into different countries and building relationships with occupants of different cultures. But while there's no universal policy to insulate a company from any cultural misunderstandings, there are some communication principles and other techniques that credit professionals can use to make themselves more adaptable.

High vs. Low

As far as communication is concerned, cultures typically fall into one of two categories: high context and low context. "High context communication styles refer to societies or situations that have long-established, strong connections," said Simpkins. "Because of the strength of the relationship or connection, the communication is understood through implication and less is communicated in an explicit manner." For example, in high context cultures, a company's management team might communicate with its employees a bit more vaguely, allowing and trusting individuals to interpret their meaning. "Asian and Arab cultures are considered high-context cultures," he added.

On the other end of the spectrum, in low context cultures, much less room is left for interpretation. "Low context communication refers to a situation where people have an expanded network of contacts. However, each contact serves a specific purpose, and the communication takes a shorter period of time. Expectations are less inferred by the situation and more spelled out." Low context cultures are often found in the West, in the U.S., Canada, Australia and Germany for instance.

"Think of it this way: in the U.S., every street is identified and office buildings have an address. In Tokyo, very few streets are identified by a name or number, and building numbers are nonexistent or arranged in random order," said Simpkins.

Knowing what type of context characterizes a particular country ultimately allows a credit professional to avoid a great deal of miscommunication. When working in Japan or Egypt, two high context cultures, it's important to know